Millennium delays are costing millions

Only four of the 28 Landmark Projects will be completed by 2000, and work on the Dome could be set back by a national electricians' strike
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The Independent Online
LOTTERY GRANTS amounting to pounds 2bn of public money have been awarded to projects to celebrate the millennium without the most basic safeguards to prevent delays and keep costs under control.

As a result developments costing hundreds of millions of pounds have fallen behind schedule, costs have spiralled and only a handful will be open by 1 January.

And a national pay strike by electricians, due to start this week, seems certain to halt work on the most prestigious project of all - the Millennium Dome in Greenwich. The strike will also halt work on the London Underground Jubilee Line extension, which will transport visitors to the Dome.

Barely 100 days from the millennium, most of the 28 national "Landmark Projects", which will receive almost pounds 900m from the Government's Millennium Commission, are hopelessly behind schedule.

An investigation by the Independent on Sunday reveals that only four of the projects - which are already open - will be ready by 1 January.

When projects were announced it was generally assumed they would be ready around the time of the Millennium celebrations but many will not now be open until 2002 or later, though the Millennium Commission will be wound up around the end of 2000.

The commission says it does not have a list of the original scheduled opening dates. But a comparison of a list available in July and the latest one supplied by the commission shows at least 11 have been put back in the last three months (see table).

Dozens of projects with cost overruns have appealed for extra funds - the commission refuses to say how many requests there have been or for how much money.

Most were turned down but the commission, chaired by the Secretary of State for Culture, Media and Sport, Chris Smith, has so far agreed to bail out five projects with an extra pounds 4m.

The Millennium Commission is spending pounds 1.26bn on 186 capital projects around the country; pounds 449m on the Millennium Dome, pounds 200m on individual projects and pounds 25m on festivals. So far the commission has actually paid out pounds 889m. But it has failed to insist that any of the grants have penalty clauses to ensure projects run on time and on budget.

Experts on the construction industry expressed surprise. Grant Prior, news editor of Construction News, said: "This is bonanza time for the construction industry - there are so many projects it is impossible for the Millennium Commission to keep an eye on all of them.

"So it's very surprising they haven't put in a penalty clause. It is an elementary precaution to protect yourself against risk."

A spokesman for the Government's financial watchdog, the National Audit Office (NAO), said: "Whether there should be a penalty clause is generally judged on a case-by-case basis but we would expect them generally to be encouraged."

Now the Conservative spokesman on culture, Peter Ainsworth, is to call for an NAO inquiry into the delays, funding and lack of penalty clauses. He believes the commission has allowed projects to be delayed because they have been unable to raise private sponsorship to match Lottery grants.

"There will be considerable disappointment if a substantial number of projects which were intended to open in time for the millennium celebrations won't be," he said.

One millennium project which the NAO will be asked to take a particularly close look at is the Portsmouth Harbour development, which includes a controversial 600ft high "landmark tower" complete with white-knuckle rides and other amusements. The project has been dogged by delays and wrangles over funding from the developers. It was originally scheduled to open by January 2000 but is now more likely to do so late in 2001.

A spokeswoman for the Millennium Commission said: "Although the year 2000 is important, the purpose of the grant is to create a legacy for the future and benefit the community for many years to come. The fact that they are a little bit late doesn't make the building any less useful. It wouldn't help us to have a penalty clause."

It would be the responsibility of the recipient of the grant to decide whether to include a penalty clause in the contract with developers. The commission did not know how many, if any, contracts included such a clause. Asked why it did not insist on penalty clauses, she said: "If we did that it would put unnecessary onus on the project. If they are worrying about the time it is not helpful to the project."

She added: "It was never stipulated they had to be built by December 1999. Some of our grants weren't given out until November 1997... It's an investment in the future."